Which type of mortgage loans does Fannie Mae not purchase?

Which type of mortgage loans does Fannie Mae not purchase?

• A. Mortgage loans secured by properties outside Hawaii
• B. Mortgage loans secured by properties in lava zones 1-2
• C. Mortgage loans secured by commercial properties
• D. Mortgage loans secured by properties located in lava zones 3-9

Answer: (B)

Fannie Mae does not purchase mortgage loans secured by properties in lava zones 1-2 because these areas are deemed high-risk due to the potential for volcanic activity. Fannie Mae aims to mitigate risk in its loan portfolio, and properties located in lava zones 1-2 are closely monitored due to the threat they pose from possible eruptions and lava flow. In contrast, Fannie Mae can handle mortgage loans secured by properties outside of Hawaii, as there are no geographical restrictions on the locations of properties they purchase, provided other criteria are met. Additionally, mortgage loans secured by properties in lava zones 3-9 fall within areas deemed to have a lower risk profile and are thus eligible. Commercial properties, while not Fannie Mae's primary focus, can still be relevant in transactions they handle under certain programs; however, residential loans are their main area of business. The heightened risk associated with zones 1-2 is what specifically excludes those properties from Fannie Mae's lending criteria.

Fannie Mae does not purchase mortgage loans secured by properties in lava zones 1-2 because these areas are deemed high-risk due to the potential for volcanic activity. Fannie Mae aims to mitigate risk in its loan portfolio, and properties located in lava zones 1-2 are closely monitored due to the threat they pose from possible eruptions and lava flow.

In contrast, Fannie Mae can handle mortgage loans secured by properties outside of Hawaii, as there are no geographical restrictions on the locations of properties they purchase, provided other criteria are met. Additionally, mortgage loans secured by properties in lava zones 3-9 fall within areas deemed to have a lower risk profile and are thus eligible. Commercial properties, while not Fannie Mae's primary focus, can still be relevant in transactions they handle under certain programs; however, residential loans are their main area of business. The heightened risk associated with zones 1-2 is what specifically excludes those properties from Fannie Mae's lending criteria.